Chinese semiconductor firms are rapidly expanding into Southeast Asia, with ASEAN countries emerging as key partners in their international push. Despite hurdles in developing their own chip industries—Singapore's limited scale, Malaysia's talent gap, and Vietnam's underdeveloped infrastructure—China's capital, technology, and expertise offer significant spillover benefits in the region.
Although China still lags behind global leaders in the semiconductor space, its resources make it a formidable player in ASEAN, where neutral positions in the US-China tech rivalry provide a strategic advantage. Chinese firms are capitalizing on opportunities in IC design, manufacturing, and particularly advanced packaging, which could help close the gap with global heavyweights like Nvidia, AMD, and Qualcomm.
China's top three packaging companies—JCET, Tongfu Microelectronics, and Huatian Technology—are leading the charge. JCET, the largest player, acquired Singapore's STATS ChipPAC in 2015 and ADI's testing facility in 2021, bolstering its advanced packaging capabilities and strengthening ties with top global clients.
Tongfu Microelectronics, which has a long-standing partnership with AMD, has also been scaling up. It bought stakes in AMD's plants in Suzhou and Penang in 2016. Revenue from these facilities surged from 45% in 2017 to nearly 70% in 2023. The company plans further expansion in Penang, riding AMD's growing market share.
Huatian Technology took a similar route, acquiring Malaysia's Unisem in 2019 to enhance its global footprint. Specializing in RF and automotive electronics, Unisem's expertise has broadened Huatian's market reach, despite the semiconductor industry downturn that slashed Unisem's 2023 revenue by nearly 19%. Huatian's acquisition also supports Chinese chip design firms in navigating overseas markets.
China's semiconductor push into Southeast Asia underscores its ambition to deepen its global presence. While challenges persist, the region is becoming a strategic frontier in China's quest to compete on the world stage.
